Unholy Water is a consumable weapon which, when thrown, will corrupt a small area of blocks, turning regular stone into Ebonstone Blocks, and regular sand into Ebonsand Blocks. It spreads the corruption much quicker and more efficiently than Corrupt Seeds, and also could be used to remove The Hallow. As it can corrupt sand blocks, it is fairly easy to create; it is also the only method of legitimately corrupting anything other than dirt before Hard Mode is activated.
Unholy water could be taken to pre-hardmode worlds to make the corruption spread a lot faster, though the Hallow could still overtake some corrupted biomes after defeating the Wall of Flesh.

Notes

Prior from 1.2, Unholy Water was the best way to spread the corruption, but after the 1.2 update, the Clentaminator with a Purple Solution (Corruption) or Red Solution (Crimson) spreads the corruption a lot quicker (The whole screen in only 2-3 seconds.) than the Unholy Water.

Unlike Holy Water, Unholy Water can be created before Hardmode, if the Corruption generated over a desert.

The damage caused by Unholy Water is not affected by any damage increasing-factors, including all-encompassing ones such as the Wrath Potion or Destroyer Emblem.